BILL ANALYSIS �
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THIRD READING
Bill No: SJR 28
Author: Monning (D)
Amended: As introduced
Vote: 21
SUBJECT : Earthquake insurance: affordability
SOURCE : Author
DIGEST : This resolution memorializes the President and
Congress of the United States to enact the Earthquake Insurance
Affordability Act (EIAA).
ANALYSIS : This resolution makes the following legislative
findings:
1.A magnitude 7.8 southern California earthquake modeled by the
United States Geological Survey and the Southern California
Earthquake Center at the University of Southern California in
2008 found that such an earthquake could cause more than $213
billion in damage, and affect roughly one out of every 15
workers in the United States, and that the nationwide toll on
unemployment and lost productivity could be severe.
2.Risks from flood and earthquake are generally not included in
homeowners' insurance and must be purchased separately, but
few homeowners purchase earthquake insurance for many reasons,
including its high cost.
3.The National Flood Insurance Program makes federally backed
flood insurance available to homeowners, renters, and business
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owners in exchange for state and community floodplain
management regulations that reduce future flood damages.
4.There is no requirement at the federal or state level to
obtain earthquake insurance for purposes of securing financing
for real property located in high risk areas, leaving the
mortgage industry, including Fannie Mae and Freddie Mac,
effectively the insurer of last resort.
5.California Senators Dianne Feinstein and Barbara Boxer have
introduced the EIAA that authorizes a federal guarantee of
limited postearthquake borrowing by actuarially sound state
residential earthquake insurance programs that would lower the
cost of earthquake insurance for homeowners who buy coverage
from nonprofit, state earthquake insurance programs and direct
funding to effective seismic-mitigation measures.
6.With more Californians insured, postevent disaster assistance
would cost less to both the state and the federal government,
and communities could recover more quickly.
This resolution memorializes the President and Congress of the
United States to enact the EIAA.
FISCAL EFFECT : Fiscal Com.: No
AL:nl 6/4/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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